The Co-operative Group - History

History

The Co-operative Group developed over 165 years from the merger of co-operative wholesale societies and many independent retail societies, changing from a wholesale operation to a major retailer. The group's roots can be traced beyond the Rochdale Society of Equitable Pioneers established 1844. The eight Rochdale Principles included distributing a share of profits according to purchases that came to be known as 'the divi'. In 1863, the North of England Co-operative Wholesale Industrial and Provident Society Limited was launched in Manchester by 300 individual co-operatives in Yorkshire and Lancashire. By 1872, it was known as the Co-operative Wholesale Society (CWS). Throughout the 20th century, smaller societies merged with the CWS, including the Scottish Co-operative Wholesale Society (SCWS) in 1973 and the London-based South Suburban Co-operative Society in 1984.

By the 1990s, CWS's share of the grocery market had declined and the viability of its business model was in doubt. It sold its factories to Andrew Regan in 1994 and in 1997 he made a hostile £1.2 billion bid to take it over. There were allegations of "carpet-bagging" — new members who joined to make money from the sale — and fraud and commercial leaks. After investigations by a private detective and a subsequent criminal court case, Regan's bid was rejected and two senior CWS executives were dismissed and imprisoned for fraud. Regan was cleared of all charges. The episode proved to be a catalyst for rejuvenation which is continuing today. Tony Blair's Co-operative Commission, chaired by John Monks, made major recommendations for the co-operative movement, including the organization and marketing of the retail societies.

In this climate, after years of aborted discussions, CWS merged with its affiliate Co-operative Retail Services (CRS) in 2000. The society's headquarters are on the north side of Manchester city centre near Manchester Victoria station. The complex includes two tower blocks, New Century House and the solar panel-clad CIS Tower. Other independent societies are part owners of the group and their representatives are elected to the group's national board. The group manages The Co-operative brand and the Co-operative Retail Trading Group (CRTG), which sources and promotes goods for food stores. There is a similar purchasing group (CTTG) for co-operative travel agents.

At the start of 2007, the group began discussions with United Co-operatives, the UK's second-largest co-operative, about a merger of the societies. On 16 February 2007, the boards announced they were to merge subject to members' approval, and on 28 July 2007 the new society came into being. At the same time, the group transferred the engagements of the Scottish Nith Valley Co-operative Society which, while trading profitably, was suffering a burden with its pension fund commitments. In July 2008, the group announced a deal to purchase the Somerfield chain of 900 supermarkets and convenience stores. The sale was completed on 2 March 2009, costing £1.57 bn.

Also in 2008, the group bought ten convenience stores trading as Bells and Jacksons in the north and east of England from J Sainsbury. In autumn 2008, Lothian, Borders & Angus Co-operative Society members voted to transfer of engagements to the Co-operative Group. The transfer came into effect on 13 December 2008. The group announced in November 2008 that despite the economic downturn, half year profits had risen by 35.6 percent to £292.6 million for the six months to June 2008. In January 2009, Co-operative Financial Services and the Britannia Building Society announced their intention to merge, subject to regulatory and member approval. Members of the Plymouth & South West Co-operative Society joined the Co-operative Group in September 2009.

The group's reputation suffered a blow in 2007 after it was fined £250,000 because 38 of its 41 stores in Sussex failed fire safety inspections. It was fined £210,000 in 2010 after an investigation at one of its Southampton stores.

In May 2010, The Co-operative Group unveiled plans to build a new headquarters in Manchester. The initial phase of construction has commenced on Miller Street near the existing estate where the Group has been based since 1863. The project, entitled NOMA, aims to reflect ethical values of the organization in its design, construction and its relationship with employees and the surrounding communities. The centrepiece of the initial development is One Angel Square. Occupation of the new building is scheduled for October 2012.